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Real Madrid have released a statement explaining the source of their income
Real Madrid, the iconic Spanish football club, has achieved an unprecedented milestone in the world of sports finance: surpassing €1 billion in operating income before the disposal of fixed assets for the 2023/24 financial year.
This landmark achievement not only solidifies Real Madrid's position at the pinnacle of football but also underscores its exceptional business acumen and resilience amid global economic challenges.
In the fiscal year ending June 30, 2024, Real Madrid reported operating income of €1.073 billion, marking a remarkable 27% increase from the previous year.
This surge in revenue comes on the wake of strategic initiatives across various business sectors, despite ongoing challenges such as stadium renovations and fluctuating broadcast rights income.
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The driving force behind their historical achievement
1. Sporting triumphs
On-field successes, including winning the Champions League, LaLiga, and other prestigious titles, within the club like the basketball first team who won the League, the Copa del Rey and the Spanish Super Cup, as well as making the EuroLeague final, have significantly bolstered the club's global appeal and fan engagement.
These achievements not only elevated the brand but also attract lucrative sponsorship deals, merchandise sales and hefty bonuses for their first teams.
2. Commercial expansion
The club has aggressively expanded its commercial footprint, enhancing merchandising and sponsorship activities.
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Notably, securing a new sponsorship deal with HP as their sleeve sponsor has injected substantial revenue into the club's coffers.
3. Transfer market success
Real Madrid has leveraged incremental increases in revenue gained from the transfer market. In 2023/2024 financial year, Madrid obtained 60 million euros more than the previous financial year, 2022/2023.
Real Madrid's success story extends beyond revenue figures to include financial stewardship:
4. Cost management
The club has effectively managed operational costs, maintaining a balanced approach to expenditure despite significant investments in player acquisitions and facility upgrades.
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5. Debt management
While undertaking substantial investments, particularly in stadium renovation totaling €1.163 billion, Real Madrid has maintained a prudent debt-to-equity ratio and robust financial position. Excluding the stadium project, the club boasts a minimal net debt of €8 million, reflective of its financial stability.
6. Profitability
Excluding the stadium renovation project loan, Madrid's cash balance as of June 30, 2024, sits at 82 million euros, compared to a cash balance of 128 million euros as of June 30, 2023.
In addition to the cash balance of 82 million euros, the Club has undrawn credit facilities amounting to 395 million euros as of June 30, 2024. These financial resources comfortably allow the Club to meet its expected payment commitments.
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While Real Madrid prepares to complete its stadium renovation in the upcoming financial year, expectations are high for continued revenue growth and enhanced operational efficiencies.
The club anticipates a further boost in stadium-related revenues once all business areas are fully operational.
Commercial activities, including merchandising and sponsorship ventures, are poised to capitalize on the renovated stadium's enhanced capabilities and the allure of recent sporting achievements.
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